Pooler purchased 61% of Scenic's outstanding common stock for $646,419 on January 1, 20X6, when the book value of Scenic's net assets was equal to $365,000. The non-controlling interest (NCI) had an acquisition-date fair value of $252,103. Trial balance data for Pooler and Scenic as of December 31, 20X6 are shown below. At the time of acquisition, Scenic's A/D balance was $35,000. Additionally, several assets had fair values that differed from their book values (BV): Inventory, $21,000 above BV; Land, $10,000 below BV; Equipment, $60,000 above BV; and a copyright, $18,000 above BV. The equipment had six years remaining in its service life, and the copyright had five years remaining. Per GAAP, management evaluated goodwill and found no evidence of impairment.

During 20X6, Pooler and Scenic had several transactions that occurred between the two companies. First, the companies had intercompany payables and receivables totaling $15,000. Second, Pooler sold inventory to Scenic for $85,000 that cost Pooler $50,000. Third, Scenic sold inventory to Pooler for $80,000 with a cost of $58,000. At the end of 20X6, Pooler had $25,000 of the inventory from Scenic in its inventory. Scenic's year-end inventory count showed $40,000 of inventory remaining that it had purchased from Pooler. As this was Pooler's first year of ownership of Scenic, there were no intercompany inventory transactions in 20X5.

Pooler uses the fully-adjusted equity method in accounting for its investment in Scenic.

1. Show all equity-method entries under the fully-adjusted equity method related to the investment in Scenic during 20X6 including Pooler's initial purchase. You may use a spreadsheet or document.

2. Show a consolidation worksheet for 20X6 using the accompanying template that includes all necessary adjustments needed to produce a single income statement, statement of retained earnings, and balance sheet.

3. Show the 20X6 year end Balance Sheet and Income Statement.

TABLE 1:Trial Balance as of December 31, 20X6
Account	Pooler	Scenic
	Dr	Cr	Dr	Cr
Cash	35,664		55,000
Accounts Receivable	97,000		72,000
Inventory	300,000		68,000
Equipment	50,000		25,000
Land	175,000		95,000
Buildings	825,000		265,000
Accum. Depreciation		388,000		20,000
Investment in Scenic	389,145
Cost of Goods Sold	250,000		244,000
Selling Expense	195,000		38,000
Depreciation/Amort. Expense	60,000		15,000
Dividends	80,000		18,000
Accounts Payable		80,000		45,000
Bonds Payable		188,000		90,000
Common Stock		480,000		215,000
Retained Earnings		315,000		150,000
Sales Revenue		1,000,000		375,000
Income from Scenic		5,810